The whole world is battling with the coronavirus, and so does our economy. This pandemic has affected almost every country, every economy, and even individuals. In this lockdown, many production units and industries are permanently closed and leave many many people employed, which leads to a contraction in the economy and G.D.P. The economies are immensely suffering due to which real gross domestic products. (G.D.P.) decreased by 7.2% in the second quarter of 2020. This is the worst fall since the year 1997, included in the ecosport report by Motilal financial services.
Real G.D.P. of progressive economies contracted by 11%, excluding China. In fact, China is the only country with positive growth in the economy, with an increase of 3.2% among all the 39 countries in the second quarter of 2020. Real G.D.P. of emerging and developing economies fell by 14%, according to Motilal Oswal’s financial reports. Whereas, Taiwan is the country that posted the lowest decline in the economy with a fall of 0.2% among all the nations. On the contrary, India’s economy shrinks by 24%, which is the worst fall economy among the 39 countries.
World’s real private final consumption expenditure (PFCE) declined to a record 11% last quarter, while real gross capital formation (GCF) plummeted by just 6%, YoY. However, the total government spending on final consumption (GFCE) has remained constant.
In the middle of the economic lockdowns and social distancing activities related to COVID-19 globally, the record decrease in PFCE was not unexpected. Both 39 countries declined, ranging from -2.9 percent in China to -28 percent in Singapore. Nevertheless, considering the substantial fiscal stimulus, real GFCE growth was undoubtedly surprising. Real GFCE declined in advanced economies by 0.6 percent YoY but rose in developing economies by 1.9 percent, the study said. However, real GFCE in emerging economies rose about 10% YoY during the period, excluding China.
Moreover, Here Live Enhanced explore the fall in the global GCF is much smaller than during the Great Financial Crisis (G.F.C.), because of the rise in China’s economy with a 10%, as China is the third-highest contributor to the global GCF. It noted that the real PFCE of India contracted by 26.7%, and the real GFCE saw a rise of 16.4% in Q2 2020 (YoY). Regarding the real GCF, India observed a 47.5 percent fall in Q2 2020 (YoY), the study added. Investments decreased in A.E.s by 15 percent a year and in E&DEs except for C.N. by 26 percent a year, said by the report.